Grassi Advisors & Accountants
CPA, Partner, Cannabis Practice leader
What aspect of the cannabis industry does your firm specialize in (compliance, growth, distribution, etc.)?
"Grassi’s Cannabis Group specializes in business consulting, tax planning and compliance services that help entrepreneurs and investors navigate the complexities of the industry and overcome obstacles standing in the way of their profitability and long-term success. Using strategies customized for cannabis companies, our professionals advise growers, dispensaries, distributors and other industry professionals on how to structure their businesses, maximize tax savings, secure funding, manage cash flow, implement new technology and comply with complex industry regulations."
Tell us something someone new to the industry needs to know – that they probably haven’t thought of?
"Operating a business in the cannabis industry is unlike any other business endeavor you have ever pursued. With marijuana still classified as a Schedule 1 substance on the federal level, cannabis business owners are restricted from many tax benefits, traditional funding sources, bankruptcy protection and other advantages that their peers enjoy in other industries. This poses a lot more financial risk that must be planned for and mitigated from the very start. It is critical to work with advisers and service providers who are familiar with the sector and its many rules and limitations."
Give us one element or factor that is key to getting a license.
"The social equity component of the application is something that should be well thought-out before you even begin your license application. In an effort to create more diversity and opportunity in the industry, states are putting a heavy emphasis on this expectation and prioritizing applicants who demonstrate that their cannabis businesses will positively impact communities that were most disadvantaged by marijuana prohibition and the war on drugs."
How do you see the industry growing/changing in the next 12 months?
"I believe the cannabis industry will continue the upward trend we’ve seen in the past few years, in terms of size, geography, sales and economic impact. We will continue to see a lot of M&A activity, as multistate operators and vertically integrated companies look to execute more strategic acquisitions and grow their market share. But, I believe the challenges of the industry will increase right along with the opportunities. For instance, we are going to see more and more IRS audits of cannabis companies, as the agency cracks down on businesses that do not comply with Section 280E tax restrictions and deduct ineligible expenses."
Give us your elevator speech: Why should someone hire your firm?
"In an industry that is far from conventional, cannabis companies need more than traditional tax and accounting services to achieve success. Our industry advisers provide the guidance that cannabis, industrial hemp and CBD businesses need to make confident business decisions, grow their companies and minimize risk. As legalization increases, but tax savings and funding options remain limited, our advisers show clients how to make the right moves at every turn, from structuring their business for maximum tax benefit to planning their exit strategies. We understand the industry on a local, national and international level and leverage strategic partnerships across the U.S., Canada and overseas to help our clients."